Business

One in three 'behind on rent' since housing benefit changes

  • 19 September 2013
  • From the section Business

One in three council tenants affected by a recent cut to housing benefit has fallen behind on rent since the policy took effect, figures suggest.

The TUC's False Economy campaign made Freedom of Information requests to all of Britain's councils; 114 responded.

Data revealed 50,000 tenants had fallen into arrears since 1 April 2013 when the housing benefit changes came in - a move critics called the "bedroom tax".

The government said the figures did not represent "long-term" changes.

The policy was introduced to reduce the housing benefit bill and free up homes for families living in overcrowded conditions.

It means that housing benefit was cut to tenants in a council or housing association property deemed to have extra bedrooms they did not need.

Strictly speaking, the government did not bring in a new tax, but said it was removing the "spare room subsidy", which allowed claimants to receive between £50 and £100 a week in rent support.

Authorities had argued the subsidy put social sector tenants in a better position than those in the private rental sector.

The new housing benefit bill is estimated to have affected some 660,000 households - roughly a third of social sector claimants.

The government has predicted that savings to the taxpayer will amount to £505m in 2013-14, and £540m the year after.

The Department for Work and Pensions said the move was in its early stages and it was "carefully monitoring the policy nationally, ensuring the extra funds to support vulnerable tenants are used well as these changes are introduced".

'Only get worse'

False Economy's report is the biggest study of the effects of the benefit change carried out so far.

None of the 50,000 tenants were in arrears prior to the benefit changes.

The council with the greatest percentage of tenants who had fallen behind was Barrow in north-west England. Of the 289 tenants there affected by the cut, 219 have not been able to pay rent since the policy came into effect.

False Economy campaign manager Clifford Singer said the figures show that, along with other benefit cuts, the benefit change is "driving tenants and families who were just making ends meet into arrears".

He predicted that tenants could struggle even more if council payments designed to help the most in need stop.

''The worst part is that these figures have been collated while councils' emergency Discretionary Housing Payments are still available; they are being used up at record speed and when they run out, these figures will only get worse," Mr Singer said.

The National Housing Federation has also carried out a survey looking at the numbers of tenants in arrears.

It found that a quarter of households affected by the cut have fallen behind in their rent for the first time ever - 11,000 out of 44,000 households were in arrears according to data given by 38 of England's housing associations.

The National Housing Federation's Chief Executive David Orr, called the figures "damning".

"What more evidence do politicians need that the bedroom tax is an unfair, ill-planned disaster that is hurting our poorest families? There is no other option but to repeal," he said.

'Have to lump it'

One of the central criticisms of the policy is that there are not enough one or two bedroom homes for people to move into.

The National Housing Federation estimated in March that although 180,000 households were under-occupying two bedroom social homes, only 85,000 one-bed social homes became available in 2011-2012.

It is one of the reasons why Tony Wilson, a former civil servant who worked on housing policy, thinks that rent arrears could become the new normal in social housing.

Now head of policy at Centre for Economic and Social Inclusion, he said that research shows most tenants are unlikely to move out of their homes - instead they will deal with the cuts.

"Essentially people either reduce what they spend, or they find work. The problem is that even where people are looking for work, they're not finding it.

"I think, going forward, this is going to be a permanent problem for social landlords and for Local Authorities, of increasing rent arrears. To some extent, they're going to have to put up with that, they're going to have to lump it.''

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